The Indian economy grew 7.4 percent in the second quarter ended September, showing some improvement over the 7 percent expansion in the quarter before but a notch lower than the 8.4 percent in the same quarter of the last fiscal.
The government welcomed the figures, saying they held out hope for achieving 7.5 percent GDP growth in the fiscal 2015-16.
As per official data on gross domestic product (GDP) released by the Central Statistics Office (CSO) under the statistics and programme implementation ministry, the growth of 7.4 percent was led mainly by expansion in commercial and financial services and manufacturing output.
GDP, which is the aggregate market value of all the goods and services produced in the country, had expanded by 8.4 percent in the corresponding quarter of last fiscal.
“GDP at constant (2011-12) prices in Q2 of 2015-16 is estimated at Rs.27.57 lakh crore, as against Rs.25.66 lakh crore in Q2 of 2014-15, showing a growth rate of 7.4 percent,” a statement quoted the CSO as saying.
“Quarterly GVA (gross value added) at Basic Price at constant (2011-12) prices for Q2 of 2015-16 is estimated at Rs.25.80 lakh crore, as against Rs.24.02 lakh crore in Q2 of 2014-15, showing a growth rate of 7.4 percent over the corresponding quarter of previous year,” it added.
The GVA, which is a gauge to measure the value of goods and services produced in a particular sector or a grouping of industries, had stood at 8.4 percent in the corresponding quarter of last fiscal.
According to the data released, economic activities which registered growth of over 7 percent in Q2 of 2015-16 over Q2 of 2014-15 are “trade, hotels and transport, communication and services related to broadcasting, financial, insurance, real estate and professional services and manufacturing”.
During this period, the growth in agriculture, forestry and fishing was 2.2 percent, mining and quarrying grew 3.2 percent, electricity, gas, water supply and other utility services’ growth was 6.7 percent, construction at 2.6 percent, and public administration, defence and other services grew 4.7 percent, CSO said.
Growth in the commercial services segment, which includes trade, hotel, transport, communication and services related to broadcasting, in the quarter under review was at 10.6 percent, compared to 8.9 percent in Q2 of the last fiscal.
The financial services sector which comprises financing, insurance, real estate and professional services grew by 9.7 percent, a fall from 13.5 percent in the corresponding quarter of 2014-15.
Manufacturing output rose by 9.3 percent, as compared to 8.4 percent in the first quarter of the last fiscal.
Farm sector growth was flat during the quarter in question at 2.2 percent, compared to 2.1 percent in the same quarter last year.
Commenting on the GDP numbers Finance Minister Arun Jaitley said: “Our second quarter GDP figure is 7.4 and the manufacturing figure is 9 is a happy news. Private sector investments have now started picking up, and I hope it picks up faster.”
“Q2 GDP growth at 7.4% strengthens positive outlook for current year. 7.5% for the year looks achievable,” tweeted Secretary Economic Affairs Shaktikanta Das.
The Federation of Indian Chambers of Commerce and Industry (FICCI) said the uptick in growth showed that the economy is on a recovery path.
“We need to maintain this momentum and move on to a higher growth trajectory, which calls for continuous reforms,” said secretary general A. Didar Singh but cautioned the global economy has been volatile and domestic demand is restrained.
He said it is “important to remain proactive on the reforms front and focus on implementation” and they are also looking to RBI’s assessment of the economic situation in the fifth bi-monthly monetary policy to be announced Tuesday.
Confederation of Indian Industry director general Chandrajit Banerjee said the GDP data “indicates that recovery has gained strength, as we had anticipated”.
PHD Chamber of Commerce and Industry president Mahesh Gupta called for more reforms in agriculture and construction, specially looking into the “crucial” latter sector’s “poor growth”.
Agriculture sector reforms would be critical to address supply side bottlenecks, he added.